Written by: Mike Senecal
Edited by: Lillian Guevara-Castro
In a Nutshell: Think again if you believe the big mobile carriers have your best financial interests at heart. That’s the message from Rob Webber at MoneySavingPro, a leading comparison site for cellphone plans. Instead of subsidizing high-end phone purchases with locked-in contracts, choose a much lower-cost mobile virtual network operator (MVNO) to get the best deals. The big carriers use a carrot-and-stick approach and prey on consumer vanity for the latest tech to keep them buying plans they don’t need. MoneySavingPro compares MVNOs and handpicks the best to help consumers spend their money more wisely.
Let’s say you finance a new television purchase at BestBuy over three years. Wouldn’t you be miffed if BestBuy started hassling you as the end of the loan term approached to trade in that TV and finance a new one?
Of course you would. Yet that’s just what the big cellphone carriers effectively do, according to Rob Webber, Founder and CEO of MoneySavingPro, a comparison and review site dedicated to bringing transparency to telecoms.
Webber ought to know. A UK native, Webber was surprised to learn when he moved to the U.S. just how behind Americans are when it comes to cellphone plans.
More than 50% of UK residents purchase phones and plans separately using what Americans call a BYOD (bring your own device) model. More UK and EU consumers regard phones as commodities rather than status symbols, and carriers compete aggressively, keeping prices low.
But the big U.S. carriers’ marketing prowess has resulted in millions of Americans paying more for phone service than they have to due to confusing contracts, hidden fees, and commission-chasing salespeople. Users rate the big carriers poorly, yet many don’t seem to understand there are alternatives.
Webber and MoneySavingPro are out to change that.
Ironically, the solution is right under Americans’ noses. Verizon, AT&T, and T-Mobile partner with dozens of wireless providers that purchase bandwidth from them wholesale and sell it on the retail market. Prices at these mobile virtual network operators (MVNOs) are far lower, and their terms are far less binding.
At a time when millions of Americans are unable to afford a $1,000 emergency expense, according to recent surveys, Webber and MoneySavingPro point consumers in the right direction to save hundreds annually on what has become an essential communications device.
“If you operate as a monopoly and abuse your customers, they’ll only put up with it until something better comes along,” Webber said. “Eventually, everyone will leave because you’ve mistreated them and lost their trust, and now they have a better solution.”
Bring Your Own Phone and Save with MVNOs
When people learn what Webber does for a living, many remark that they’ve been with one of the big three carriers for years. When Webber comments that they must appreciate the service, they almost invariably respond, no, they don’t — not at all.
“Then why are you still with them?” Webber asks.
It’s a matter of not knowing the alternatives. MoneySavingPro independently rates MVNOs according to strict criteria, comparing prices to other providers offering similar services and considering the 5G and 4G LTE networks they operate on.
Customers usually bring their phones to MVNOs, although some offer purchases separately from data plans. Webber and his team favor networks that don’t limit data speeds or deprioritize customers during peak times. Offering a range of easy-to-understand plans is a plus, as is offering additional savings for multiple lines and a commitment to more extended service periods.
They also favor networks that offer quality customer support and earn high customer ratings. Other benefits, such as free trials, money-back guarantees, hotspot data, international coverage, and eSIM compatibility, push some MVNOs to the top.
The site is free to use and does not have ads. MoneySavingPro earns revenue from affiliate relationships with MVNOs, but they compete for attention, and the consumer has the final choice.
“Although there are 30 MVNOs, I only work with about 10 because the rest still use the old-school tactics of the big guys,” Webber said. “We are genuinely trying to handpick the best of the best in terms of value for money.”
Of course, you won’t find ads from the big three on the site either.
“Because there’s such a disparity in price between the big guys and the small guys for effectively the same service, I decided I couldn’t call the site MoneySavingPro or put my face on it if I recommended companies that were overcharging,” Webber said.
Carrot-and-Stick Approach Locks In Consumers
Webber said the big three carriers deliberately confuse consumers through various tactics. The main play is to keep the consumer locked in a constant upgrade cycle in a classic carrot-and-stick approach.
The carriers advertise free phones as a good deal, but doing the math reveals the offers only slightly subsidize significantly overpriced plans that require three-year commitments. Going with a MoneySavingPro-recommended MVNO can net hundreds in savings.
“I want consumers to be aware of that because few are willing to come out and say it,” Webber said. “If you’re operating in the industry, you’re probably taking commissions off the big guys.”
Site organization is a strong suit at MoneySavingPro. Visitors can compare prepaid, unlimited, family, and other MVNO plans according to price, carrier, and carrier coverage. The site also offers information on cellphone purchases and 5G plans.
Many phone consumers don’t realize it, but switching to an eSIM plan doesn’t require an inconvenient call with a sales rep.
“If you’ve ever moved and tried to cancel your cable service, you know what it’s like to endure a sales pitch explaining why you shouldn’t cancel,” Webber said. “These days, you can go to the site, complete the entire process on your phone, and switch within minutes with the same number.”
Not that the big carriers emphasize how easy switching carriers is. Webber said clouding the picture is their primary strategy. That’s why they emphasize the value of unlimited data plans when most people could get along just fine with a more limited plan. Webber said most people use around 10 gigabytes of cellular data monthly, and many use less.
“The low-cost MVNO carriers have tiered plans, so you don’t have to get unlimited,” he said. “Salespeople have passed down a lot of what you believe because they’re trying to sell you a plan, and they have to say something.”
Pay Far Less for an Essential Service
Now more than ever, cellphone consumers should examine what they’re spending. If not essential, cellphones are nearly so.
They make transacting everyday business and communicating with friends and family more accessible than ever. Location services have transformed navigation. They provide security, convenience, and enjoyment for the vast majority of Americans — 97%, according to a 2024 Pew Research Center study.
But Americans are also more financially strapped than ever. In addition to the lack of emergency savings, Americans struggle with credit card debt, with recent Federal Reserve data measuring total credit card debt at above $1 trillion.
In addition, the Affordable Connectivity Program (ACP), a federal assistance initiative that provides discounts on high-speed internet access to 23 million low-income Americans, will end in May 2024. ACP helps military families, households with seniors, and households in rural areas gain internet access to reap the benefits many take for granted.
ACP’s demise adds to many Americans’ financial burdens even as they renew their plans with the big three. Webber said that needs to stop.
Compared to the average cost of an unlimited plan from one of the big three, MVNO plans can save consumers $700 to $800 or more annually — nearly enough to deposit $1,000 in emergency savings or compensate for ACP’s loss. Going with an MVNO is also a hedge against inflation.
“It’s essential for people to know that paying for a cellphone is an ongoing expense they can reduce in a world where prices for everything seem to be going up as if they were out of control,” Webber said. “At the same time, the big three are announcing price increases, record profits, and bigger share dividend payouts. The message I’m trying to get across is that brand loyalty only goes one way.”
